Canopy Growth, one of Canada’s cannabis giants, announced on Thursday it was scaling back its global canopy to “improve the efficiency” of its operations.
Specifically, the company announced that it would sell its operations in South Africa and Lesotho to a local company. It will close its indoor growing facility in Yorkton, Sask., to “bring Canadian production more in line with market conditions. And it will close its U.S. hemp growing operations in Springfield, New York. Its Colombian growing operation will also be closed, with almost 40 people laid off, to rely only on a “light asset” model and rely on local suppliers for raw materials.
We made the difficult but necessary decision to close our Waterpoint Hemp Farm in Springfield, New York,” a Canopy Growth spokesman wrote to CNN Business. “Like many other growers in the state, Waterpoint Hemp Farm produced an abundance of hemp in 2019, which is not commensurate with current market demand or regulatory delays related to hemp extracts.
When I joined Canopy Growth in January, I committed to conducting a strategic review to reduce our cost structure and reduce our cash burn,” said David Klein, the new CEO of Canopy Growth, who joined after the ouster of Bruce Linton.
I believe the changes announced today are an important step in our ongoing effort to focus the company’s priorities and will result in a healthier, stronger organization that will continue to be innovative and a leader in this industry.
The reduction in Canopy Growth’s operations has so far not affected Europe. The canopy had already laid off some of its employees in Latin America last November as the company struggled to generate revenue. It also announced earlier this year that it would close two greenhouse sites in British Columbia, Canada, in part to rotate into outdoor crops.